Posada attended the Alejandrino High School in San Juan, where he participated in basketball, volleyball, track, and baseball. As a baseball player in high school, he was named an All-Star player at shortstop in the 1988-89 season.

He attended Calhoun Community College in Decatur, Alabama in 1991, where he received an Associate Degree. He was voted best hitter (1990), co-captain (1991), and selected all-conference (1991). He was inducted in the Alabama Community College Athletic Hall of Fame in 2006 and Calhoun retired his number (#6).

He was drafted by the Yankees in the 24th round of the 1990 Major League Baseball Draft.

Posada was a second baseman during his first minor league season before being switched to the Catcher position.

While playing for the Triple-A Columbus Clippers in 1994, Posada suffered a home plate collision in which he broke his left leg and dislocated his left ankle.

Posada has also been a member of four World Series championship teams (1998, 1999, 2000, 2009) and six American League championship teams (1998, 1999, 2000, 2001, 2003, 2009). Posada is a five-time All-Star (2000–03, 2007) and a five-time winner of the Silver Slugger Award in those same years.

Posada debuted with the Yankees in 1995, playing in one game. Posada was called up late in the 1996 season appearing in 8 games, but was not added to the postseason roster. In 1997, Posada replaced Jim Leyritz as the backup catcher and heir apparent to Joe Girardi. Girardi helped mentor Posada. The two catchers split time for the Yankees through 1999, until Girardi left as a free agent, at which point Posada became the full-time catcher.

In 2003, he hit 30 home runs (one every 16.0 at bats, ninth best in the league) and drove in 101 runs, both career highs. He batted .281 and was also fifth in the league in OBP (.405), and sixth in the league in walks (93; walking 17.5% of the time, a career high). He tied Yogi Berra’s record for most home runs by a Yankee catcher and finished third in the MVP voting. He also made the final out of that year's World Series, a groundout against Florida Marlins pitcher Josh Beckett.

In 2006, Posada posted one of his best offensive seasons and he led the major leagues with 20 pinch hits. In addition, work with new first base coach Tony Peña, a former catcher, helped him improve his percentage of runners thrown out stealing second almost 60 points above his career average. He had batted (.277) and had 23 home runs with 93 RBIs.

In 2007, Posada batted at .338, with 20 home runs, 90 RBIs, and career highs in hits (171) and doubles (42). He joined Iván Rodríguez as the only two catchers in MLB history to record at least 40 doubles in two separate seasons. He was 3rd in the AL in on-base percentage (.426), 4th in batting average, 6th in OPS (.970), and 8th in doubles and slugging percentage (.543). Posada batted .395 in September, and became the first Yankee catcher since Thurman Munson, in 1978, to finish among the top 10 AL batting leaders. His longest hitless streak was only 11 at-bats. Posada is the first catcher to hit .330 or better with a slugging percentage of at least .540 and an on-base percentage of at least .420 since Mike Piazza in 1996-97. On the final day of the 2007 regular season, Yankees manager Joe Torre allowed Posada to act as the manager for the game, an honor that Torre bestows upon a veteran player if the final game does not matter in the standings. The Yankees beat the Baltimore Orioles 10-4 to give Posada an unofficial win in his 'managerial debut'.